Northern Nevada
By Angel Orozco, CBRE | Reno
The Reno industrial market was comprised of approximately 116 million sq. ft. at the close of Q4 2024. There were six new industrial buildings delivered to the market in Q4 2024, totaling 1.0 million sq. ft. The construction pipeline had 2.1 million sq. ft. underway with another 15.5 million sq. ft. in various planning stages. The overall average asking lease rate at the end of the quarter was $0.83 NNN. The Central/Airport and South Reno posted the highest average asking rates at $0.97 NNN and $1.02 NNN, respectively.
During Q4 2024, the overall vacancy rate increased to 11.8 percent, while the availability rate reached 13.7 percent. Notably, this quarter marked the fourth instance of negative absorption since Q3 2019, resulting in negative 737,000 sq. ft. of net absorption, bringing the yearly total to negative 5.1 million sq. ft.
Looking ahead, vacancy and availability rates appear to have peaked and are expected to decline in 2025 as tenants take advantage of the short-lived, tenant-favorable lease rates on sublease spaces. Institutional owner interest in the region will persist, and sales activity is expected to increase in 2025. New electric vehicle and data center demand in the East Valley, specifically in the Tahoe Reno Industrial Center, will contribute to new transactions and absorption.
Southern Nevada
By Garrett Toft and Laura Wilhelm, CBRE | Las Vegas
The Las Vegas industrial market posted 305,000 sq. ft. of positive net absorption in Q4 2024, bringing the annual total to 3.2 million sq. ft. Although net absorption was positive on the year, 2024 set a record for deliveries and supply exceeded demand.
The overall vacancy rate ticked up another 160 basis points quarter-over-quarter, reaching 9.1 percent this quarter. Although this is the highest rate recorded since Q1 2014, it was anticipated, considering the record 14.2 million sq. ft. of new construction that came online in 2024. This was a new annual record for total amount of space delivered in a single year for the market.
With the speculative construction pipeline rapidly tapering off in 2025, the market is expected to stabilize over the course of the year. As developers hold off on new projects and demand starts to align with supply, the vacancy rate will begin to shift downward. Tenants have been relatively slow to sign leases over the last two years, and any uptick in activity will be welcomed by the market.
